State hopeful of cut in GST rate

The State is hopeful of the Central Government making an announcement on cutting down the Goods and Services Tax (GST) slab on labour component of ongoing major projects from 12% to 5%.
Indications to this effect were reportedly dropped by officials of the Union Finance Ministry, and the government is hopeful that an announcement on the issue would be made during the next meeting of the GST Council scheduled on October 6. The Commercial Taxes Department is gearing up to make a presentation on the impact of GST on labour component in ongoing projects like the Mission Bhagiratha, Mission Kakatiya and 2BHK two bedroom housing projects.
Flagship projects
Senior officials said the State will get some more respite once the reduction in the slab is notified. “The two flagship schemes, Mission Bhagiratha and Mission Kakatiya, are labour intensive and we can save anything from Rs 2,000 crore to Rs 3,000 crore once the announcement is made,” a senior official told The Hindu.
The State government initially calculated the impact of the GST on the ongoing projects to be around Rs 19,200 crore on the exchequer. Thanks to the intense pitch made by the State government, the Central government has agreed to reduce GST on the ongoing projects from 18% to 12%, saving around Rs 6,000 crore. Reduction in the GST on labour component would further ease the burden on the Government, the official said.
The Central government has also indicated that it was considering providing some relief to the export sector like simplification of procedures and approach for claiming refund on the input costs incurred by the exporters.
Pharma sector
This would provide big relief to the pharmaceutical industry which was one of the major contributors to exports from the State.
“In the normal course, the exporting units submit their claims for refund after paying the tax and the delay in reimbursing them is adversely affecting their working capital requirements. The Centre is positively considering simplification of procedures to ensure that exports are not affected due to delays in reimbursement of the claims,” the official said.
Source :  The Hindu


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